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Squawk on the Street

News/Business. Mark Haines, Erin Burnett. Opening bell market action.












Us 21, Toyota 19, America 13, Texas 13, S&p 11, Washington 10, U.s. 10, Erin 9, Chicago 8, Mexico 7, Ben Bernanke 7, Europe 6, Goldman Sachs 4, Eu 4, New York 4, Philadelphia 4, China 4, Usaa 4, Steve Liesman 3, Adobe 3,
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  CNBC    Squawk on the Street    News/Business. Mark Haines, Erin  
   Burnett. Opening bell market action.  

    February 10, 2010
    9:00 - 11:00am EST  

rescue funds from the european union. this according to a reuters story that did an interview with the economics minister there. there is no question of a deal he is quoted as saying. >> right. and that's big news potentially. i think maybe this gets -- the ball gets thrown into the germans' court though and maybe the eu is signaling the germans this is your problem whether it's the government, whether it's the banks. the bigger issue for investors here and around the globe is this is just a continuing of the deleveraging story. we'll continue to see the dubais and greece problems like that going around and the real fear of course is that it spreads to other countries in the eu. but we hope not. >> just to tell you how fluid the story is right now, there are some headlines that are moving right now, comments from the greek prime minister saying that greece is ready to take extra measures to make sure our plan is guaranteed. so this -- >> yes, they are. >> yes, we can. >> right. >> this has been something that's been whip sawing the markets. you can guess by how things are starting out today it's going to
continue. thank you very much for joining us today. >> thank you. >> great to have both of you here. steve will be back here with me tomorrow. make sure you join us then. right now it's time for "squawk on the street." live from the financial and snow capital of the world, this is "squawk on a very snowy street" the bull getting buried outside but the big question is can he run for another day inside? after yesterday's substantial gains. good morning, everybody. i'm mark haines. >> and i'm erin burnett live in san antonio. we're on the road in texas today, mark, getting outside of wall street, far away from washington, to cover some of the other big stories to find out whether america is really on the road to recovery. on our list, mark, how nafta went far beyond canada, america, and mexico in this booming town. mark, this, i hope, will not be our last stand.
>> gee, it doesn't look sunny and warm. >> no, it really doesn't. it's new york minus the snow. >> what a shame. front and center. >> oh, yeah. >> front and center this morning, euro debt. there are conflicting reports on where things stand with greece. one german official saying this morning germany has not agreed to anything yet. >> and ben bernanke will be releasing his ideas on how the fed is going to pull back from its current role of propping up the economy in every way, shape, and form. we're going to have that live at 10:00. i know his comments are coming out, mark. i'm not sure if he's actually going to physically be there because you know in washington it's a little snow. what are they going to do? >> i think they now have a total of 50, five zero, inches on the ground. >> yeah, yeah. >> we also have big snow issues in new york, baltimore, philadelphia, airports closed, schools closed. it's a real mess. this is a live picture.
>> wow. >> well, it was a live picture of reagan national airport. it is empty. >> that's amazing. it really is. mark, you know i remember when there was a forecast of snow things would be shut down and called off and to your point pretty incredible what has been going on there. snowmageddon. that's an amazing picture, live. no one at the airport. the futures right now are plus 0.70 on the s&ps. we needed 1.42 to get to fair value. so it's very close to break even, at least at the open. let's hit the markets starting with bertha coombs at the big board. >> reporter: hey, mark. greece will continue to be the word as those headlines go back and forth about the rescue plan. we saw the futures fall back and also saw european banks which had gained on the session in europe this morning also fall as well. so that bears watching. disney this morning a bit lower.
earnings came in flat from a year, actually beat expectations but disney says investors or rather consumers and advertisers are still cautious. advertisers, they say, continue to wait until the last minute to pull the trigger on advertising. meantime the "new york times" this morning beating expectations and says advertisers are coming back. things are stepping up. they see things a little better in circulation, in fact, also rose. sprint nextel a loser, continuing to lose subscribers. the only part that's doing well is the boost mobile but they pay less. meantime in the mining and metals area, under pressure this morning. arcelormittal cautious saying it still sees lower commodity prices, the number one miner beats but it, too, is cautious, saying so far it is seeing a stimulus driven recovery and is not sure about the underlying fundamentals of the recovery globally. over to the nasdaq now and mike huckman. >> thanks. good morning. the nasdaq premarket indicator is up slightly. the nasdaq is actually the only one of the three major indices
that's higher so far this month. granted we're only 1/3 of the way through february but it is up nonetheless. 0.1%. what could move this market even higher today is a couple of big computer upgrades. we've got bank of america and merrill lynch raising dell shares to a buy, up about 2.4% premarket. we have jeffries raising adobe systems as well to a buy but keeping the price target at 40 bucks up 3.5%. we've also got earnings to talk about here and the chinese search engine giant had positive strong results based onion line ad sales up almost 9%. of course investors think it will continue to benefit depending what happens with google in the battle with china and finally, the biocheck beat check, we have new guidelines being published for uses of the blood cancer drug for celgene. and there were positive late results for isis but investors are concerned about safety and
side effect issues there. what's going on at the nymex? >> reporter: well, listen. i'm not at the nymex but i'll tell you what's going on in chicago outside of the weather. that is everybody of course trying to handicap what ultimately happens, how it all unfolds with regard to is there going to be aid to greece? many believe that bailouts in the european zone would never have occurred, but has the window closed for them to deny they will occur? many believe it's a done deal but the treasury market hasn't moved in the past half hour. rates are slightly changed from yesterday but virtually no big move. we have $25 billion in tens today but maybe the moodies headlines getting the most. it seems as though portugal may be in line for some adjustments but some of the ratings headlines today have dismissed the notion that spain would be in for anything. so everybody continues to try to handicap all the credit issues that have affected the fx
markets. now let's hop over to the pond to where the epicenter of this conversation is, rebecca? >> reporter: let's fill you in on the equity markets across europe. there are three major markets we usually took about, ftse, dax, and cac. they are all trading higher by about 1%. but it's the peripheral economies across europe that are really making waves. greece, all about greece. you can see athens as far as the equity markets are concerned right down the south end of our map here 2.7% higher. we do know the euro zone finance ministers are holding a video conference today discussing what to do about the greek situation but it's not just greece. there's lots of talk about contagion. ireland has been putting budgetary reforms in place, 1.6 higher for equities in ireland. also portugal and spain have been struggling and there, too, we see gains coming through. in spain the ibx is moving up by
1.9%. portugal one of the economies that could be struggling as well. there we are seeing gains coming through of about 2.3%. so it looks like a fairly strong day for the european markets but remember the greece story is developing minute by minute so keep a close eye on what's going on there. to recap, moody's saying today if greece only partially implements its budgetary reforms the credit rating is at risk and could come down by several notches. back to you. joining us now on the floor, my favorite. the president of empire executions, peter costa, and an official cnbc market analyst. good morning. thanks for being with us. >> great to be here, mark. >> you have been cautious, pessimistic even. >> yes. >> for quite sometime. what do you think now? >> well, what do i think now? i think yesterday's reaction was obviously going off of the news from greece, which is nonnews.
we're still not getting the news we want to see. once we see that news you'll see the market bounce again like you did yesterday and then we'll continue on the costa, you know, the costa trough. i'm not going to say that. but we're probably going to react positively to some news from greece after that's over with. then you got to get back to what's really -- what matters. >> what does matter? why is the market going down? >> the market is going down because you still have 9.7 unemployment which i think is a little -- i think that number is skewed. but anyway, you still have major unemployment issues. you still have a recession that they can tell me that it's over because we've had some growth. you know what? until i start hearing major companies start rehiring people i still don't think the recession is over. i think the recession is going to continue further and once you hear major companies rehiring in some sort of significant way, then we can say we're out of the woods. right now i don't think we're out of the woods and the market should be responding to that. >> do you have a target for downside risk? >> well, you know, i've been saying on the s&p like 1020, you
know, the dow maybe 94, 9500. i still go with that. i don't think it's a major move on the down side but coming from where we came from you're talking about 12% or 13% off the top. you know, i'm still staying with that. i'll stick with that. >> thank you, peter. >> thank you. >> peter costa. now back to erin in warm and sunny san antonio. >> reporter: hey, i'd go with just one of those two things. san antonio is one of the fastest growing cities in the nation and the mayor here says the rest of the country can learn quite a few things from his city's recovery. he is up next, live from san antonio. the state of texas is home to more exports than any nother the united states. we'll be back. while driving on electricity.t the gmc sierra hybrid. the most fuel-efficient full-size pickup on the road. may the best truck win.
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>> reporter: we're back in san antonio, texas in front of the alamo. part of the reason we're here is texas has been one of the best states during the recession. it didn't have as much of a boom and not as much of a bust. san antonio in fact ranks number two on forbes' list of the fastest recovering cities in america. there's actually been even some hiring here. joining us now to talk about it is the mayor of san antonio and in charge of, well, making this city hopefully number one on some of those counts. so, mayor, let's start off with exactly what is different about san antonio. i mean, i know there is obviously military here, at&t as your largest employer, what is it that you would say that san
antonio did differently or did right that other cities could copy? >> well, a couple things. first, over the years san antonio's local economy has been a very diversified economy and over the last couple decades it's been particularly based on three sectors that have done relatively well compared to others even during this downturn. the military, by september 15th, 2011, 12,000 jobs will come to for the sam houston as military training is consolidated there. we got the cyber command recently. >> and cyber security is a huge issue for the country and you are the capital of that by a lot of measures. >> we have a lot of private contractors who have come to do government contracting. secondly, health care in biosciences has grown tremendously over the years. we have a very large health care sector and education, even though folks don't necessarily think of san antonio that way, we have the second largest of the ut campuses, ut-san antonio
has about 30,000 folks and a very strong community college system. we're relatively a young city with a diversified local economy. i think that's truly what stood out for san antonio. >> and is there anything that you would highlight as the president tries to create jobs across america and talks about exports and green jobs and texas is also the capital of green jobs, that you would say people should look at? do you have any specific tax policy or something that you'd say, look at this? this works? >> i do. i think first of all, texas doesn't have an income tax and that's been helpful. >> i'm sure a lot of people around the country are saying let's go to texas. >> texas has had generally a favorable business climate. for san antonio, we have been assertive in pursuing those targeted industries we believe will help balance our local economy and are growing. specifically health care, cyber security. allstate announced yesterday
they are bringing 600 new jobs to san antonio. san antonio is emerging as a great sun belt community. >> two major questions. the one is the push to go green, nuclear energy, i remember nrg announced they'd have the first nuclear plants in generations and they're going to be here. now there is apparently a huge brouhaha that we may not be getting nuclear power in san antonio at all. as goes san antonio could go the nation. that may mean no nukes. are we going to get a nuke plant? >> of the four projects identified by the federal government as possible for loan guarantees each and every one of them has had a bit of a bump in the road but the answer is that san antonio, the south texas project likely will happen. >> right. >> the question is the extent of participation by cps energy which is our municipal utility and, you know, hopefully things will work out. that has been tied up in some litigation. >> right. >> i think that's coming to its conclusion. we're hoping they can resolve it in a good, with a good business solution so that the project can continue.
>> right. well, mayor castro, thanks so much. we appreciate you being with us. many of mayor castro's supporters dub him the hispanic barack obama. this is one of the most demographically mixed cities in the country. they have a major toyota tundra plant. plans for a second shift were put off for a little while but toyota says they're going to go ahead and add that so they are also counting on that for some of the robust recovery. >> thank you. here are the s&p minis trading up until the bell and currently up just 0.5. we need a couple points to get up to fair value. the buzz beyond the big board is next. and official estimate of the cost of shutting down the government, about $100 million a day in lost productivity. many of us find productivity and government hard to reconcile. so do you think you should get a rebate on your federal taxes for every day washington is shut down?
vote on squawk on the
welcome back to "squawk on the street" live from san antonio and the new york stock exchange. toyota a topic of discussion for everyone. it's also a major employer in san antonio. they make toyota tundras here. in fact, they just reopened that plant on monday of this week while they had to delay adding a planned second shift they are going ahead with plans to do that, which they say toyota is ontrack to happen the first week in march. jeff bennett is a reporter with "the wall street journal" and is live this morning at the chicago auto show covering toyota. good to have you with us, jeff. is this something, what we're seeing in san antonio, that we'll start to see more and more
across the country, that toyota is going to restart production of some of the recalled vehicles? >> reporter: yes, toyota said they were really working on the problem and had made some fix and were supposed to get production back going at many plants so we're waiting to see how fast that spreads out. some of those plants where they had shut down because of problems with sticking brake pedals are beginning to come back up. >> and certainly, you know, it's getting a lot of talk here because a lot of jobs and people are especially regarding that second shift anticipating that coming back. the front page story that many viewers may have seen on the journal today was is toyota no longer a management model? some people might snicker and say of course not. do you think toyota can keep that title? >> this is going to really put the pressure on them especially their executives. if they want to keep that model and keep the model that has really become what many of the other auto makers had strived to
reach, this real connection, they're going to have to really kind of come back from this and make some moves. we are still waiting to see when toyota's executives are going to come out, make some bigger statements, bolder statement. remember, we're still seeing a lot of comparison between japan and u.s. but we haven't seen the company come together as one. >> all right. well, jeff, thank you very much. we appreciate it. sorry it was brief. we do have breaking news now at goldman sachs. >> reporter: hi, erin. the cfo of goldman sachs is making comments right now saying financial out performance will drive goldman stock. he says he does not expect a change in the fed regulating the firm. he says it is unrealistic to give up their bank holding status. remember that was conferred on to them to help save them during the heights of the crisis. and once again reiterating financial out performance will drive the stock. here's a teaser.
he says the 2009 compensation is not the formula for this year, 2010. we know that the top 30 executives at goldman sachs got all stock when it came to their bonuses this year and their compensation and he is saying that that will not be the model for 2010. these are coming at the credit suisse financial services conference happening in miami. erin, back to you. back to mark. >> actually it's me. and they're going to stick with the bank holding company form, right? >> yes. unrealistic to give up the bank holding status. >> why? what advantage does it give them? >> well, that's a good question. we only have these headlines coming from dow-jones. we don't know what context or what else he added to those but it's happening at a conference and we'll dig into it more and as soon as we know -- there are certainly definite advantages you get from having bank holding status, more access to the fed, etcetera. >> thank you very much. appreciate it. now let's get the buzz beyond the big board. back at midtown manhattan, the
managing director of u.s. equity trading. thanks for being with us. >> good morning, mark. >> what do you make of this market? we had about a 7% correction. then we rallied nicely. but now we seem to be out of steam. what's going on? >> yeah, mark. i guess everybody is waiting on greece and you couple that with the snow we're having today in new york, we're looking for very light volume trading today. but i'm looking to drift higher. i'm treating today like a christmas eve type day where the market is just going to drift higher because really a lot of people didn't show up to work and everybody is waiting on greece. >> so we're going to wait for greece to be resolved? that could take forever. >> yeah, sad but true, mark. unfortunately, you know, this was going on in europe is infectious and as you know a lot of these banks in europe have a lot of greek debt on their books. we have to see how it plays out. eventually i feel the market is going to go up about another 10% just to get that balance off the 7% correction. >> i'm sorry, go where another
10%? >> i say another 10% from here. i'm looking for the market to go up. we sold off 7%. 10% to the up side. we've had some pretty robust earnings especially in the technology land with ibm and intel. >> thank you. appreciate it. >> stay warm. >> yeah. sometimes wall street is saying off when they mean down tan sounds too much like up. anyway, erin, back to you. >> mark, okay. coming up the largest bank here in san antonio is also among the most trusted banks in the entire country. we'll have the ceo here with us live in a moment. >> but first, futures pointing to a slightly positive open. what you need to know about today's market action right after this break. not long ago, this man had limited mobility.
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two minutes before the opening bell here are the headlines. goldman sachs, chief financial officer saying this morning, outperformance will drive goldman stock.
a german official says, still no deal on a bailout for greece. futures indicating a real wishy washy open. maybe up a little. maybe down a little, erin. >> yeah, people are looking for more news on greece. but as we count you down to the opening bells and get ready for that open let's bring in michael gurkin. good to have you with us. lots of things to talk about. everyone is talking about greece. it was interesting that disney came out and pretty much every single unit was better than expected which means consumers are, well, still spending discretionary money. >> you know, it's funny you mention that because there is such a global market and appeal to disney and for the same reasons you're coming out of a recession and maybe everyone's income isn't what it was a year or two ago. you don't see the spending at the parks but i'm almost certain as you saw their television revenue really spiked and that is because the younger population really had more time to be spent watching.
i think ad revenues clearly up in that regard. >> that is an interesting way of looking at it. okay. so when it comes to greece and beyond, what would come out in terms of what germany could say about greece that would actually matter to you, really move the needle? >> i think what happens with germany is if they find something very unstablizing on the books that would be taken into a scenario where the maturity or the duration of these type of derivatives instruments and the sovereign debt scenarios all of a sudden start to weigh themselves where it can be a lot further along on payback scenarios. i think what happened was a lot of the globe has been short euros anyway coming into this scenario because of the rumors that trickled into the market. and they did very well. >> okay. >> when we saw that huge spike all of a sudden it made a difference in the market. >> all right. michael, thank you. >> thank you very much. >> mark, it's interesting they said there's going to be $4.5 trillion of debt issued this
year. you know, greece is such a teenie, teenie part of that. i believe the u.s. is about 45% of that issuance. do you have to wonder who's going to buy it all. >> yeah. going to start, put them in the same boat with lithuania? >> i'm worried about the lithuanian mob, mark. i'm not going to say anything. >> okay. here we go with the opening bell. here at the big board the tv series "survivor" heroes versus villains. and at the nasdaq international networking group the global leaders in something. it doesn't say here. >> leaders of something. so let's get to our market reporters. leaders of each of their exchanges. we go first to bertha at the big board. hi, bertha. >> hi, erin. we've got a lot of snow here, a lot of folks who stayed home because their kids are home from school today. i was talking with art cashin and he says with the bouncing greece headlines and low
volumes, brace yourself for some volatility today. art doesn't think though that we priced in a grecian solution at this point. we could see that once we get the positive headlines. we have a crowd over at the post. disney earnings flat but better than expected and it says espn continues to be a highlight particularly with such a great football season. meantime, wind yyndam tripling dividends and resuming its buy back. 3m also raising dividends as well 3% to 52 cents a share. let's head over to mike at the nasdaq. >> thanks. good morning. we're slightly lower here at the nasdaq right at the open but it is nonetheless on pace to possibly have its first winning february in about seven years. and we've got some upgrades and earnings that could continue to boost this market higher today. we've got b of a raising dell to
a buy up 2%. we've got jeffries raising adobe systems to a buy as well, up 3% right now. baidu had strong earnings results up 8%. so did mic, the emerging markets cell phone company up more than 4% right now. finally in biotech even though isis and genzyme said a late stage study for a cholesterol drug met goals the stocks are lower because of concerns over potential side effects. pharmas brian, what's going on downtown? >> we're getting battered by this storm at the mouth of the hudson here, mike. thank you very much. it is a little bit of a quieter trade today and also pretty quiet in washington, d.c. so the inventory numbers that you might have expected for petroleum at 10:30 a.m. eastern time have been delayed because of the storms and because government offices in d.c. are closed. so the inventory numbers for petroleum will be 11:00 a.m. eastern time on friday. the nat gas numbers you expect tomorrow will be on friday as well at 10:30 a.m. eastern time. so those both moved markets so please adjust your calendars
accordingly. the api, american petroleum institute, well, they came out with their numbers late yesterday and steve liesman had a good line. at least the private sector came through with their schedule of events. the huge build in crude is a head scratcher. we'll see if it comes through on friday's report in terms of a correlation with the eia numbers, although people don't expect the credibility of that friday report to be great because of all the disruptions in working but that is a pretty bearish number. a quick look at pricing, down a little bit but not too much and the same is the case overseas with brent of course the focus on all of europe and much of the world is greece. let's go to rick in chicago. >> thanks. everybody of course trying to get a handle on foreign exchange because that seems to lately give you a leg up on any other trade you're doing. now, as a technician, you know, if you look at the dollar index hovering around 80, so it's up today coming back to that 80 mark it slipped below. we hadn't been above 8 o since, you know, last summer. but if you look at last summer, a good chunk of may, all of june, and a good chunk of july,
every one of those sessions in one way or another touched that 80 area. so, you know, you cover a lot of the same ground that you covered the last time we were here so many believe technically that this is going to be a place to camp out for a while. if that's true of course might affect many other markets. 25 billion in ten-year supply. rates were a little bit lower than they are right now. they're getting closer and closer to unchanged. seems as though the only volatility we've had in the last five sessions comes from greek headlines. mark, back to you. >> thank you, rick santelli. quick check on the markets for you. a few minutes into the trading day, what, we've been trading for four minutes now and the dow is down about five points. the nasdaq is up just a fraction. and the s&p is down just a fraction. this is pretty much what the futures foretold. your cnbc edge now with one guest from san antonio, frank holmes. u.s. global investors ceo and cio. and in portland, oregon, the
leader of capital ceo and portfolio manager. john, i'll start with you. where is thisrket headed? is this a correction? the correction over? what? >> mark, we think the market heads lower. we think in the near term about 8300, 8400. that's going to be precipitated bai yun certainty in greece, unemployment, not budgeting staying higher and the obvious is high debt loads that need to be worked off. vix goes higher. expect more volatility as we move forward. >> 8300 on the dow? >> correct. >> that is one of the more dire predictions we've gotten. >> well, but, mark, it's going down a lot faster than they go up. >> all right. >> what is your reaction, frank? >> i'm not that bearish. and i was concerned the first month of january. money supply has been contracting in america. historically there is a strong relationship to markets. but money supply has now turned
up and that usually will create a bottom. we start seeing that data come out. i think the big part is this paradigm shift taking place around the world. in the '90s a strong dollar was a strong market. now a weak dollar as strong market. '08 was a very strong dollar. bad markets. '09 was a weak dollar, strong markets. january was a strong dollar, weak market. so there is a real paradigm shift taking place. >> and so you're known obviously for commodities and in particular gold. front page of the "wall street journal" today talking about john paulson who we all know, mark, was famous for getting sub prime right. >> yep. >> and he tried to raise a billion dollars for a gold fund and could only get $90 million. you're a commodity guy and a gold guy. who's right, paulson being bullish or the investors who won't buy in? >> paulson is absolutely right. it is a paradigm shift and gold is a protection agenls the declining dollar. we need a declining dollar to deal with exports and it's basically around the world, this
competitive currency devaluation. it isn't going to happen rapidly but is a slow deterioration and i think that gold will rise. >> mark, he says gold is going up. >> all right, john. given your bearishness here, where do you put money? gold? overseas? >> mark, while i was on your show last time i said we keep it short and safe. i think 2010 looks a lot like 2008. my take on the dollar is, look. that correlation has been strong but if you look at it in the last 60 days it's moved from about 90% down to 80. i think the correlation between the dollar going down and the market going up is beginning to unhook here. as the weight of, you know, just continuing to print money rather than create jobs is starting to concern the market. and i think greece is a great example of that. >> but where do we put our money in that environment? >> short-term bonds. we run a short-term bond fund, leader capital short-term bond fund. about 50% of our portfolio is in liable or plus notes i.e. as interest rates go up we benefit and we think if you watch
bernanke closely, now that the political cloud is off him, he can go do his job and he needs to raise interest rates to keep up with brazil raising interest rates, china raising rates, australia raising rates, bernanke almost has no choice but to begin raising rates at some level. now, what that is we'll find out in about a half hour. >> all right. john lekas, frank, thank you very much. >> thank you. >> thank you. >> and obviously what he's referring to is we'll get the prepared remarks of ben bernanke in a half hour where he'll lay out maybe how he is thinking about raising rates and getting out of the mortgage market. coming up a financial services company that didn't get a bailout and is apparently the most trusted one in all of america actually turned a profit last year. right here in san antonio. the ceo will be with me in just a couple of moments, mark. plus an update on what is being forecast will turn into a monster snowstorm today. we're live from reagan national, the heart of snowmageddon 2010. and if it costs $100 million a
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good morning. i'm meteorologist kelly cass from the weather channel. we have another blizzard on our hands around d.c., baltimore, even up towards philadelphia and new york city some of the northern cities that missed out on the last major storm we are certainly getting it now with heavy snow reported back towards teterboro, new jersey, visibility down to about 1/4 mile. we are seeing mixing in of rain around philadelphia but that's not even going to last long. we expect it to switch back over
to snow and as you can see blizzard warnings continue for all of these areas shaded in the orange. not a good day for travel at all, mark. >> awe, shucks. thank you, kelly. airports are a big mess. let's head to hampton pearson at reagan national in washington. hampton? >> reporter: well, mark, reagan national along with dulles and marshall bwi are all closed shutting down air travel in the mid-atlantic region. how do you know an airport is closed? there are no planes out here on the runway area or next to the exits. what are we talking about as far as flight volume? again, reagan, dulles, and bwi together have about 2,000 flights a day. if you add in philadelphia, there's another 1200 flights a day, all canceled as we speak. you pretty much wiped out air travel possibilities here in the mid-atlantic region. and it's going to have a ripple
effect back up into your area as well. ironically, of course, the airlines themselves, airline stocks had a very big day yesterday, sort of pacing what was an overall big market day. why are the airlines overall doing well? number one a lot of those economies of scale they've put in place are really starting to pay off. the fact that when you get on a plane nearly every seat is filled and of course we all love those higher chicken prices and the baggage surcharges. but again, the airports here shut down and we've got near whiteout blizzard conditions now with all the blowing and drifting snow as well. mark? >> thanks, hamp. time for commodities corner. blizzard edition. with snow bounding the east coast. let's check energy. right now heating oil and natural gas are, hum, mixed. heating oil down. natural gas up. here's a check on crude and rbob
gasoline. both down a little. interesting. you would think energy would be up on a day like this. but anyway, let's get back to erin in san antonio. we know so many banks struggled to survive during the financial crisis. a lot of them still on life support. in san antonio a little bit different as it's turning out quite a few things are here during the financial crisis. one company here, bank managed to turn a profit without taking any taxpayer money and actually compete with the likes of citigroup and allstate and geico and bank of america, any financial services company, talking about usaa, a company that specializes in providing financial services to the men and women of the armed forces, military families but also regular americans as well. joining us here in san antonio is the president and ceo of usaa. good to have you with us, sir. we appreciate it. you are a military man i know
yourself. if you could start out by explaining what it is that you -- you do everything. you do credit cards, deposits, mutual funds. you compete with all of the big guys but yet you didn't stumble and need a bailout. >> that's exactly right. usaa is an integrated financial services company and do all of the major areas, property and casualty insurance, life insurance, banking, investments, financial planning. we've done very well during this economic downturn. in fact last year, 2009, was our best year ever in history financially for sure. >> and your best year ever. now, i mean, it's one thing to say you didn't stumble like everybody else but to say it's your best year ever, how come? was that because a lot more people wanted to give you deposits and put money into your mutual funds and is this an issue of people trusting you? >> i think it's a trust factor. our customers, our members, 7.4 million who do business with us really trust us because we are taking care of them and looking out for their best interests,
not the company's, which translates into a very solid and stable company. >> one thing i think worth highlighting here some of our viewers may be familiar but others aren't, the mayor was talking about san antonio being a diversified economy and certainly it is but it has real military roots. you have four of the biggest bases in the country here. this is a city would you say that still has real and close ties to the military? >> this is military city, usa. we've had that moniker for years and are very proud of it because it has a high concentration of military bases. i think the military ethic and background gives the city some real strength from a discipline point of view and from a diversification point of view. >> what are you seeing in terms of where military families are pullthroughing their money? are people nervous, putting it all in sort of short-term money markets, or are you seeing people willing once again to go back into the equity market? >> i think people are confused about where to invest. they hear so many things on television nowdays, so much transparency, and i think they want to be assured that their
money is protected in a safe environment, that people who are managing their money are not taking big risks. >> preserving. >> i think right now people are not in a growth mode except some investors but most are saying can i preserve my capital? can i ride out the storm? can i make it to the other end of the tunnel? >> joe, thank you very much. we appreciate it. by the way, those people are -- i'm one of those people. maybe you are too but hank paulson the former treasury secretary is also. he told warren buffet yesterday i'm about preserving my capital right now not making any. a lot of people are saying that. thanks so much, joe robles. we appreciate it. chief of usaa as we said. >> my pleasure. >> mark? >> thank you very much. up next, stocks on the move including a food manufacturer and an oil and gas company. and another snowstorm postponing the bernanke congressional hearing. the fed chief's testimony will be heard. we'll explain how. breaking details of the bernanke
exit plan just minutes away. the bull getting buried by snow down on wall street although the worst we are told will not hit new york until sometime this afternoon. and the bull is getting kind of snowed under by the bears as well. don't go away. host: could swito 15% or more on car insurance? host: does charlie daniels play a mean fiddle? ♪ fiddle music charlie:hat's how you do it son. vo: geico. 15 minutes could save you 15% or more on car insurance.
central park in february. at least -- no i'm not going to say that. anyway, once again if you're somewhere else in the country and thinking what's with these wimps in new york because it doesn't look that bad? the main force of this blizzard is expected to hit sometime this afternoon with heavy snow and 40-mile-per-hour winds. so this is just the prelude as it were. want to bring your attention to some stocks on the move. that means we go to tmatt nesto. >> dean foods is getting mugged. one new low in the s&p 500 and dean foods is it. the stock is down more than 10% today. their fourth quarter results
disappointed and they warned back in november that things might not be looking so good. the stock got hammered then. this in fact is the third guidance shock that they've had in a row. august, november, now february, because their forward forecast for the first quart inner the full year also a disappointment. dean foods the worst stock in the s&p this morning sorry to tell you. eog resources is down about 6.5%. their private was off 13%. their revenues when you back out property disposal gains were down 25%. they did raise their dividend a little bit, about 7%. but that stock is getting hammered on the earnings miss. they missed by six cents a share, 92 versus 98. we look at affiliated managers group, the boston based consortium buying another fund to fund managers, pantheon managers, a private equity fund
of funds. up 8% leading the russell 1000 this morning. tiffany's up for a third day from a five-month low. bank of america merrill says get on the tiffany wagon here. we're going to 48, baby. they raised it to buy from hold. it's the second best stock in the s&p as i speak. back to you. >> all right. thank you very much, sir. it's been one year since the allen stanford case broke. remember that? while the scandal may not be as big as bernie madoff in dollar terms it's another major blow to investor trust and confidence. and one year later the scandal is still revealing new secrets. senior correspondent scott cohen joins us with an update. >> this makes the madoff scandal look like child's play. you saw allen stanford at a recent court appearance over the summer. he has been jailed since june ruled a flight risk and it is clearly taking its toll.
last spring, accused of running an $8 billion investment scam and refusing sort of to address the speculation he was a government informant. >> reporter: were you helpful to the authorities in the u.s.? >> talking about the cia? >> reporter: well, you tell me. >> i'm not going to talk about that. >> reporter: why not. >> i'm just not going to talk about that. >> reporter: well, we may never know about the cia but we do know that allen stanford threw a lot of money around washington. he and his firm spent more than $5.5 million on lobbying since 2002 according to our tally and millions on campaign contributions to politicians in both parties. some got free trips to antigua the home of stanford's offshore bank among them powerful texas republican pete sessions the son of a former fbi director who reportedly e-mailed stanford the day the authorities moved in saying i love you and believe in you. sessions' office says it can't authenticate the e-mail but the congressman says -- but says the congressman was fooled with everyone else and now wants
stanford prosecuted to the fullest extent of the law. stanford's attorney dismisses all this talk of influence. >> what's wrong with influence? first off, i don't think anybody has made a serious ill gatialle there was improper influence. there is a big difference. >> we'll explore stanford's political ties and influence. more of that exclusive interview with his attorney in our new documentary "more secrets of the knight" at 10:00 tonight right here and cnbc. erin, you got to love texas, right? >> absolutely. by the way, interesting. the use of "love" in that word e-mail. thanks so much to you, scott cohn. next, we have breaking news on the fed exit strategy. ben bernanke is not going through the snow but details are coming out of a release from his comments in just about three minutes' time. and how san antonio where i'm sitting right now benefited from nafta. we are back in two minutes from
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all right. we're back. let's check out the markets. pretty quiet, really. first of all, a lot of people haven't come to work and so even the electronic trading is generating less volume than normal. and a little volume at the big board way under what is normal so the dow is down 14 and the nasdaq down just a tad. let's get to steve liesman on bernanke. >> reporter: thanks very much. a significant speech from fed chairman ben bernanke in which he says the fed is considering raising the discount rate before long. specifically what he says is they will raise the spread between the fed funds and the discount rate which you remember during the crisis went down to 25 and then had normally been 100. so a sense that it will eventually go back, the discount rate, the rate banks borrow from the federal reserve. but he goes out of his way to say changes in the discount rate
do not signal a change in the monetary policy outlook. in fact he says the policy outlook is mostly unchanged for the january fomc meeting in which the fed said it expected to remain exceptionally low for an extended period. he uses those words as well in the speech. at some point the fed he says will have to tighten conditions by raising rates. when it does so, get ready for this. the fed is considering a new benchmark rate other than the fed funds. the reason is because the fed funds is now suffering from a lack of liquidity. he says the fed could use interest paid on reserves as the new guide for markets to communicate policy. raising interest on reserves the fed chairman says will put, quote, significant upward pressure on all short-term rates. so at least for a time the fed funds goes away as the main policy tool and interest on reserves becomes the new one. we told you about that report january 19th. he says the fed might also target, this is new now, reserve quantities as a policy guide, something the fed used to do many years ago. the fed will eventually return
says the fed chairman to lower balances and the fed funds target. the economy, this is really the one comment he makes on the economy, he says continues to require the support of the fed's accommodating monetary policy. more news here the fed will consider further reductions in the term of discount window loans from the current 28 days. all of these things are going back to normal. some comment on the bear stearns and aig portion of the balance sheet, he says they are about $116 billion or 5% of the balance sheet so what happens to them? he says the fed expects the bear stearns and aig exposure to decline gradually over time and does not expect any losses from bear stearns and aig. the fed could absorb large quantities of reserves with another tool, reverse repos expanding the primary parties for the reverse repos. in addition the fed will use mortgage backed securities in reverse repos as well which i
hadn't heard before. the fed expects to duct tests of a new facility, terms of deposit like certificates of deposit. they'll now conduct these in the spring. together the reverse repos and deposits will drain headlines of billions of dollars of reserves. technical things the fed will do when it's time to drain reserves. the fed has the option. he talks about it, now will it sell assets? he says the fed has the option of redeeming or selling securities. we knew that but will he use them? the fed could try tightening first solely by raising interest on reserves then do reverse repos then term deposits then sell assets. he does not anticipate selling security holdings in the near term. as conditions strengthen they might. allowing mbs and agency debt to run off as they mature but currently rolling over maturity treasuries but may not do so in the future. in other words would stop buying, rolling over the treasury holdings. the fed may sell mortgage backed securities if additional tightening is warranted but the fed chairman says any mortgage backed sales would be gradual.
the mortgage market needs to hear that from the fed chairman. the fed funds for a time could become a less reliable indicator. we had that earlier. mark, a lot of technical stuff here but the two big take aways here are that the discount rate could rise but don't see that as a tightening of policy and then second this idea which we have been talking about but i don't think the fed chairman has said this that the fed funds rate goes away for a time period as the main tool of fed policy communicating to the markets. mark? >> steve, when you talk about reserves. >> yes. >> interest on reserves, etcetera. what are you talking about? what reserves? >> okay. so banks have a certain amount of reserves that are required to be on deposit at the federal reserve. >> right. >> and to hold because they have loans outstanding a gens this. there is a whole bunch of other money stle on deposit at the fed that they don't have to have. these are called excess reserves. we're talking about interest on excess reserves. we haven't really settled the
economics hasn't settled on the right abbreviation here so the idea is they pay interest on these excess reserves to keep them in the fed on account at the fed because it's more lucrative to keep them there than it is to loan them out. >> and that then means a slower pace of lending and therefore a slower pace of the economy. >> right. it would keep that money from getting out into the economy. >> thank you very much. >> thank you for making me elucidate that point. thank you for elucidateting so well. let's get the market check with bertha coombs at the big board. >> this is something the market was clearly anticipating. interestingly this morning it's been the financials that have been the one bit of strength. right now getting a little stronger as far as the banking index. take a look. jp morgan leading the dow. the european banks, which have fallen back a little bit as we've gotten this wavering over
what is going to happen with greece, whether the eu will step in or germany will pretty much be the bigger back stop. they've come back off a little bit as well. goldman sachs this morning making some comments at a conference, says he believes financial outperformance will continue to drive the stock and he doesn't expect the fed to change the formula. interestingly enough. let's head over to mike huckman at the nasdaq. biotechs are a little strong at this hour. >> yes. some are. and some aren't. but the nasdaq overall turned ever so slightly positive just about seven minutes ago but as steve liesman was busy elucidating, we have moved lower right now down 0.3% despite the fact that there are a couple of big computer upgrades to talk about here at the nasdaq today. b of a raising dell shares to a buy up almost 3%. jeffries raising adobe systems to a buy up almost 2%. we've got baidu the chinese search engine giant trading at a new 52-week high today. right now up 9% on strong earnings results but on the flip
side we have biotech isis pharmaceuticals down 17% on huge volume despite the fact that it and its partner genzyme announced its late stage study met the goals of a cholesterol lowering drug but there are concerns over potential liver side effects. pharmas let's go to brian at the nymex. >> ever since liesman opened his mouth we weakened here though not by a lot. we were down six or seven cents now down 38 cents on price but it did move. whether there is a correlation of tracking equities which weakened a little bit as well is probably what happened. want to share comments out of opec. they didn't change their forecast but did raise questions about the health of the u.s. recovery and think demand could actually tick down moving forward. i also want to point out natural gas is slightly higher, off the highs but up of course weather the consideration there. all the metals are to the down side on a stronger dollar. let's go to rick in chicago. >> thanks, schacht. you know, the tecxt steve liesmn
discussed moved the markets a little bit. fed funds off just a little bit. remember when they sell off that's the activity you would put forth if you thought that the fed any time soon would be actually raising rates. but it was a small move. in terms of the coupon curve, we did see two-year note yields pop up so the curve flattened a bit but it's already reversing out and the vietnamese changed the complexion of their currency against dollars in essence the fourth devaluation since mid '08. some say vietnam is asia's greece. back to you. >> rick, did you feel the earth quake? >> you know what? i didn't feel it. i heard it. about 5:00 a.m. eastern i heard the china in the china cabinet rattling and it woke me up but i didn't know it was an earthquake until i heard it on the news. >> thanks, rick santelli. for reaction to the fed chairman's testimony let's bring in the senior and fixed income market strategist at fed
rated investors and erin of course joins us as well. joe, good morning. thanks for being with us. >> good to see you, mark. >> i assume you've had a chance to at least look at the headlines and what bernanke is going to say when he finally or when it finally stops snowing. what do you think shifting from fed funds, interest on reserves, things like that? >> i think they've done a good job of telegraphing all of this. you get a little more of the specifics this morning but nonetheless fed funds were not going to be the primary tool in as much as they're sitting at zero. this was a very -- is a very creative fed, put in lots of measures. they systematically are allowing them to roll off. and i think we have to look at fed funds zero to 25 for the foreseeable future. >> a lot of questions have been raised in recent years and rightfully so about just how much control or influence the fed has. would these moves increase or decrease its influence? >> i think it keeps it the same
or increases it. the lack of control, i think, largely has been a misguided statement. the fedex colluding the fed this would have been a total disaster so the debacle it already was would have been meaningfully worse. i think they do get high marks for most market participants keeping things in order, the liquidity programs, guaranteed programs, etcetera. now it's just time to reverse all of that. we would not look for, i heard steve talking about the potential for purchasing or selling i should say securities back into the market. can't see that happening for quite a while. >> right. >> erin? >> i wanted to follow up on that point. just the other day we heard the st. louis fed president bellard talking about that very issue and he seemed to be at least rhetorically more interested in the fed say selling some of those mortgage backed securities and doing that this year before any move in rates policy. so i guess i have two questions. one, what is the right order? and two, is there real disagreement on the fed about
when and if to sell assets? >> there are what appear to be minor disagreements. i guess it's good they're having the debate just like it's good there was a dissenting vote into the last meeting. the order, i don't see them selling mortgages. that would really risk an impact on not only td mortgage market, housing market, simply the interest rate market. you might be back in the mess again. i think the order is you start to do, you do allow these programs to roll off and not reverse them and then you raise fed funds ultimately. the purchase of mortgage securities by and large, the good news is we have the ultimate buy and hold owner of the securities so they can let them run their average life and life goes on from that point. >> so this makes the fed more transparent in your opinion? >> i believe so, yes. >> and thus it will be easier for everyone to figure out what the heck they're doing? >> i hope so. >> or trying to. >> trying to. and i think bernanke has done a good job of not getting the market too excited. there still is risk to the downside. >> yeah.
>> greece is relatively small but just a reminder that there are issues out there around the globe. >> all right. >> we can't jump to it. >> thank you very much for sharing your thoughts. appreciate it. >> take care. the market at least did not like what is in bernanke's testimony. and i know cause and effect is sometimes very hasty on wall street but the decline started the moment liesman started talking about what was in the bernanke testimony. >> yes. >> we were down about 20. now we're down 80. up next, gm's north american president tells cnbc how he's upping the ante to get people excited about buying american. >> and what better place to talk about one of your favorite things, mark, beef? >> later, 11 of the past 17
sessions triple digit swings. we're going to look at how to play the volatility. >> and as we head to break -- a's of independent investors? let's ask. when you're trading a stock, every penny counts. i hate when the trade is done and you find out you paid more than the quote price. i want it at the price i expect... or better. td ameritrade's unique trading platform uses multiple market centers to help you find the best possible price. i like those odds. i know they can't flat out promise a better price, but they're always looking for it. they know what matters to me. every online stock trade is always $9.99. not a penny more. and no maintenance fees. who else does that? are you ready to declare your independence? td ameritrade. independence is the spirit that drives
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i'm julia boorstin with the stocks making news in this morning's west coast wakeup. newly public aol is looking to tap into facebook's awed yenls.
aol's new instant messenger incorporates the chat service and allows a.i.m. users to post status updates on facebook betting that 400 million facebook's chat service will take off. the u.s. economy is growing but not fast enough for a strong labor market recovery according to a new index that tracks goods moved by truck. the polls of commerce index which tracks truckers' credit card purchases debuts today. rhapsody is going it alone. real net works and mtv networks announcing they plan to spin-off the streaming music service into an independent company. rhapsody has been struggling to persuade consumers to pay 13 bucks a month for unlimited access to millions of songs. at the super bowl the house won big. nevada casinos won almost $6.9 million on the big game as bettors waged some $83 million up from last year. now over to erin in san antonio. >> all right. thanks very much. something to learn. the house does usually win. now from san antonio to chicago,
opening day of the auto show there. and an outo show like we haven't seen in years because america's car makers hope to season their recent momentum and figure out how to, well, do better on the back of the toyota debacle. phil lebeau is there in chicago. phil? >> hi, erin. toyota is certainly a topic of conversation here at the chicago auto show. nobody wants to come out and see it but a lot of people are looking at this as an opportunity to pick up market share, regain sales they lost over the years because of toyota doing so well. this as the latest on the toyota troubles clearly show that this is not going away any time soon. there are mounting questions in washington about what the federal government knew. those questions intended for the nhtsa folks, national highway traffic safety administration, a lot of those questions supposed to be asked today but because of the snowstorm in washington the hearing has been postponed. the federal government is looking into complaints about the power steering on 2009 and
2010 corolla -- this is not a formal investigation. as i mentioned a number of automakers here see this as an opportunity to capitalize on toyota's troubles. keep in mind toyota's market share in january fell to its lowest point in four years. general motors certainly one of the auto makers that has a chance to pick up some business and it expects to increase its share and profitability in the next couple of months. this morning on "squawk box" we had a chance to talk with the president of gm north america and he is very careful not to come out and say that general motors is targeting toyota because of its troubles. >> may the best car win is what our advertising says. we're very confident in the product lineup we have and for the first time perhaps we get some people looking at general motors and our products that maybe haven't looked at us before. >> and that's what we're hearing from a number of executives. nobody will come out and say good. i'm glad toyota has stumbled and is struggling right now. everybody is trying to do their best to accentuate the
difference between their products and toyota. they believe this is the time to go out in front of the consumer and say listen if you really want to buy a car with quality as good as toyotas if not better now is the time to come across the street. that's the latest from here at the chicago auto show. back to you. >> thank you very much. i'll take it. public sector workers in greece. on strike. protesting government cost cutting. greece has been force today cut pay and raise retirement ages in order to tackle its debt weechlt should point out the retirement age has been raised from 61 to 63. i think it's 45 in france isn't it? eu officials are meeting to discuss what they will do should greece default on its debt. what would happen if greece deeflts? simon hobbs is here. european fellow, european background. and he has done a lot of research and he can tell us down to the last farthing though
there aren't farthings anymore what happens if greece defaults? >> if it couldn't raise the money it hopes to then it would have no cash to go forward. there would be civil unrest there. the $70 billion the french banks own of greek debt would be nonperforming. the $40 billion that the german banks own would be considered nonperforming and they would probably spread out to the corporate sector across the atlantic in the corporate sector and then the speculators or locusts as senior germans like to call them would move from greece to portugal to italy and there would be social unrest presumably in each country as they couldn't finance the government spending and the euro zone would break apart. remember, more people euless us euro than americans use the dollar. but that's not going to happen because there is no way there won't be a deal. it is too big to fail. >> right. >> at the very least, the end game, the imf comes in and does something. in the meantime though i think there is a big disconnect between what the market expects
in real time and wants action now and the way in which europe is likely to move over this. i don't think you'll get resolution at the summit tomorrow. it's a meeting of the full european union not of the 16 within that that are part of the euro. they're meeting next monday. the time horizons are going to disappoint the market at the moment. there's also a desire on the part of the europeans, the ecb needs to be part of the deal, certainly the germans to hold the feet to the fire using the markets and threat of further speculation to get further fiscal austerity within greece. you must remember, mark, those who are within the euro zone unlike america cannot inflate their way out of trouble. they don't have control of their monetary policy. they can't print money. they have to cut pensions. they have to cut salaries. the ceos within the public sector in greece are being limited now to 6,900 dollars a month and now the germans clearly want further cuts moving forward. they need to do that to make the
european union, the monetary union sustainable. we've got to have greater fiscal austerity. >> that's a heck of a discipline being imposed on the euro members. >> at the moment it isn't being imposed and that is the whole problem. that's why the whole thing has blown up. there's always been an intellectual concern about one interest rate capable of fitting all but the critical issue now is that they can't enforce discipline on public spending. there is no centralized control of that. what a lot of people would like to see now is a clear anticrisis policy that says if all hell breaks loose we will bail you out but this will be the cost. it will be a very real cost. the danger if they don't do that is they're not reserve currency but a bunch of fixed exchange rates. that's where the market is heading. they'll paper over the cracks i suspect over the coming months. maybe they'll do more but i doubt it. that is a real problem moving forward for how you view the euro and whether it is an alternative to the dollar. clearly it isn't.
>> thank you. simon hobbs. coming up, how you can cash in on all of the recent stock market volatility. >> and mark, live cattle futures at a six-month high. have you noticed that when you go out and get some steak? who better to talk about this risky business than someone who trades them right here in the lone star state, cattle country. and, mark, the nation's capital at a standstill because of the snow, should we get a rebate on our federal taxes for every day washington is shut down? as you know that's our poll. yes or no? for mark and for all our viewers, we're also going to be taking you to the rodeo so stay tuned for that. they've served for decades as a golden, tasty sidekick...
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you're looking at the famed riverwalk here in san antonio. we are outside the alamo. we're making a stand against the rain though we cannot complain given the blizzard on the east coast. san antonio, though, is a big hub for all sorts of agriculture especially live and feeder cattle. when it comes to cattle, texas is the biggest state in the union. now, live cattle futures are trading at near eight-month highs so there is no better time to talk beef. not just for those who like to eat it. joining us here in san antonio to talk about the situation is lindsay davis president of alamo commodities. good to have you with us, sir. we appreciate it. >> thank you. >> i'm glad someone came dressed like stereotypical texas. we appreciate it. so let's start off with the cattle at an eight-month high. how come? what's the reason for that? >> first i need to give my disclosure because we're going to talk about cattle futures.
futures trading bears lots of risk and risk and losses can be substantial. >> okay. we got that out of the way. legal requirements are satisfied. how come prices have been so high? >> well, it's from a supply and demand factor. and basically from weather. weather throwing cattle off feed and in the midwest primarily because of huge snows and ice and weather being so cold, it takes a lot of energy to keep cattle growing from feed and they can't with stand the energy factor. >> i know there are lots of ranches around san antonio, lots of people involved in the ranching business. for the lay person, other parts of the country, who doesn't know that much about what determines the value of cattle, what determines price? >> well, there are lots of factors that determine price. the quality primarily and then of course from the supply and demand factor. and however many come to these
auction sales from the surrounding communities of san antonio. >> and big auctions around here. >> there are several good sized auctions just curious as we tat the push to go green and talking about texas number one in going green and from an energy point of view but also the push to eat healthier. a lot of people want grass fed beef for example. is that something that you've seen and does that affect the price? >> locally it has not affected the price at all in san antonio. because people are accustomed to eating corn fed beef. so that nhas not ban principal factor in texas when it comes to futures trading how can the regular person go about doing it and when we're at eight-month highs and you say so much is predicated upon the weather is this one of the riskiest times to go into the market? >> not necessarily because the prices have been depressed for several months. actually several years.
and in our markets recently there's been extreme volatility and the markets act like a pu pendulum. when it really gets swinging and you have the volatility like have you it you see extreme lows, you will come back and see extreme highs. >> and last but not least the rodeo. one of the biggest in the country going on this week. we'll be talking about it more. you going over? >> we go every night. >> all right. the radio lindsay is talking about is going on, one of the biggest rodeos in the entire nation this week in san antonio. lindsay was saying all sorts of things from bull riding to i wrote some of them down, calf roping, team roping, bare back, and so we'll be actually visiting the rodeo in a couple of moments and find out a whole lot more about it. just ahead on the other side of this break, we will be talking about energy futures as well as the dow which is moving lower as mark emphasized, actually had for a moment really tripled its losses on the back of the
headlines from ben bernanke about potentially moving interest rates higher by increasing the rate for excess reserves. market could be at a key turning point as we talk about a change in monetary policy. we'll talk about that coming up after the break and how san antonio is holding its own as an economic hub. despite the challenging times.
we're back, the indexes showing lots of ups and downs. the volatility index up over 20% in the last week alone. where's the market headed next? where should you be putting your money? gentlemen, good morning. thanks for being with us. does the volatility mean anything in and of itself? >> yes, mark. i think it does. what it's telling us is much as sub prime started and that is that interlinks between markets are very important and i don't think this correction is over yet. >> all right. and tim, same question to you. is there something to be learned just from the volatility?
>> i don't think so. i think we may be going through a correction, which even in markets that are recovering, which i think we're in, a generally recovering market from the bottom, which they generally last about three years after the market hits bottom. we're about one year into that recovery. this is what you see in these recoveries after pretty severe declines in the market. you have pullbacks. i think we may be in one of them. but it's not to be, i don't think, abnormal but to be expected and we can expect the market to continue to recover over the next several years. >> this correction, has it run its course? what's the downside risk in your opinion? >> i think generally what you see after these severe declines of the market pulling back 40% or more, you have pullbacks averaging about 15%. those are normal. we're probably, what, halfway to 15% right now.
i think the market is down 7% to 8% from where we were at the dow when it was at 10,700. so we may see more downside. but i think the odds are we're going to be generally moving upward and we're probably about halfway through a market recovery or not quite one year into this and as far as the magnitude of the recovery we're not quite halfway through where we could see the market recovering from the bottom. >> really. >> yeah. generally the broad market -- >> that would, well, that still would not take us back to the record highs. >> i think we would, from the market bottom the s&p is up roughly 50% to 60%. >> right. >> and generally in these recoveries what we've seen is the s&p, the broad market, recovers about 150% from the bottom. so we're not quite halfway there and we should in this recovery meet our previous peak and surpass it. >> oh, okay. where do you see the downside
risk right now in a correction and what do you see the long-term potential? >> i think that the downside, we can't even say the correction is over until the dow goes below 9500 and the s&p 500 is below a thousand. the reason i highlight those numbers has to do with earnings but also because i think we have to keep an eye on interest rates. i don't think you can call a neutral ten-year note here to go 5%. i think 5% is a neutral number. the number we have right now is artificially low, held down by too much government buying of treasuries. >> all right, gentlemen. thank you very much. appreciate you sharing your thoughts. >> thank you. coming up the money flow this morning with stocks on the move. >> and, mark, the biggest event of the year in san antonio. it is going on right now. and, mark, i wonder if you would do bare back -- whoa -- that guy is good. >> oh, boy. wow. >> the man who makes it all
happen. mark, is that you? >> oh, my goodness. ment. >> is that -- >> no, that's not me. are you kidding? >> be sure to vote in today's street poll. that interview obviously coming up with the man who makes that rodeo go. in the meantime let us know whether you think you should get a rebate on your federal taxes for every day washington is shut down. >> i would pay extra for them to stay shut down. >> that might be the best idea of all. please put your comments in along with your yes and no. boss:hey, glad i caught you. i was on my way to present ideas
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cnbc has a new way for you to get in on today's market action. go to to play call the close. you have until noon eastern time to give your best guess on where the dow will close. i was right on monday. i came within eight points of the close. yesterday i missed by 40 or 50. today i'm going to say we close
9950. let's get to nesto. >> all right. i just want to draw your attention to aig, now the top stock in the s&p 500, comments from ben bernanke seem to be moving the market here today. the stock is up over 5% and climbing on an intraday basis so keep an eye on it. we'll continue to update you on any developments there. legg mason was number one, now number two. relegated 4% move here today. the company's short interest continues to come down as it clause its w claws back from a seven-month low, rather benign january assets under management data for the month and they were down about $2 billion. excuse me. about $12 billion month on month. sonic goes fourth quarter earnings per share much better than expected, the stock is up 6% today. right at the top of the russell 1000 you'll find this company. revenues up 7% to a billion dollars. also ahead of expectations. their margins were up 300 basis points and they raised their full-year forecast above
consensus. it deserves what it gets i guess. wyndham worldwide one of the best performers in the s&p today their fourth quarter earnings better than expected and triple their dividend to 12 cents to four. that's a lot of bull. back to you in san antonio. >> that sure is. a bullish tripling of the dividend. we'll take that as the silver lining green shoot of the day. okay. nafta was supposed to revitalize business from canada, really between canada and the u.s. and mexico and sure did that but also has had a huge impact and more global reach here in san antonio than anyone ever thought. >> reporter: it sits on the former site of kelly airforce base. but the f-15 fighters and b-1 bombers are long gone replaced with, well, just about everything else. >> in this aisle we have all this olive oil imported from italy. >> reporter: the port, all 1800 acres, has become a hub of
economic activity in what otherwise has been a lack luster industrial market. more than 70 companies use the facility as a strategic wait point for distribution for everything from paychecks to spaghetti sauce. >> port san antonio is very unique in its location and had the access to the rest of the u.s. >> reporter: beyond location henderson says port san antonio has been smart in these tough times, offering rent reductions and other concessions to keep occupancy high. >> we have air cargo capabilities, we have rail, we have trucking, and we have access to sea ports. not only in the united states, the gulf, and in the west, but also we do business with sea ports in mexico. >> reporter: nafta is the port's most important trading block but it also works with mexico and central and south america. >> i would estimate, you know, close to 40,000 pallets in here so different products in here. >> reporter: and that's just from one company, fiesta.
land locked as it is port san antonio succeeds in the most important rule of real estate -- location, location, location. >> and let's bring in steven patriotser now principal at pritzer and associates. talking about doing business on both sides of the border. pretty amazing when luyou look the president wants to double exports in the next five years. when people think about the u.s./mexico border they think about all sorts of security issues. issues or not? >> it is an issue and because of the crime that is down in mexico now but i'm very, very proud of their current president and the effort that he's making towards securing that border as well as our president doing it on the u.s. side. although it has added a new dimension. that dimensions that you must just be cognizant of that.
whenever you're doing business in mexico i always recommend that you have someone on both sides of the border that have familiarity with the people that you're going to be dealing with. >> what has it done to costs? i mean, obviously that's a land border and now with immigration and security issues combined, time has gone up, maybe costs have gone up. has it become less economical to import or export on that border? >> actually i think it's become more economical not because of the security issue but because of the trucking and ability to get things across the border. there's been a number of great advances and ability in getting product to and from the various countries. so that has helped. now, they have made improvements in -- through technology and the ability to be able to screen trucks and get through that sort of process that used to be quite a bottleneck. >> and anything that goes across the border that might surprise people or has stood out to you in your years of advising people? >> well, i tell you, it does,
because what -- with all the opportunity to be able to do business in mexico, someone is coming over, something innovative they want to make, they find certainly the system and the ability to be able to have the labor down there that is quite inexpensive is just almost any product can surprise you what they might be making down there. it's just a competitive thing. >> thank you very much. we appreciate you taking the time. and, mark, up next we are going to take the reins. next up, a good old fashioned rodeo "squawk on the street" style. i believe that that was mark. it's just video from a few years ago. and it's big business here in san antonio. we'll calf rope this story for you in a couple of minutes. >> yeah, you're right. i did that a few years ago. that's why i can't walk today. but first, oh, trish? >> oh, mark. okay. we've got a lot coming up on "the call" at the top of the
hour. we'll talk about this market selloff and how it's related to ben bernanke and his exit strategy. why are investors getting so nervous about this? does this suggest this market could in fact be looking at a correction? we will have that information for you. also toyota's problems. they continue to mount so the big question we're asking here is, are cars just too over engineered? is that part of the problem? do we need to go back to basics? we have all of that plus the ceo of open table. you know the restaurant reservations company. we'll talk about his sense of the economy, what the economic outlook is. all coming up only on "the call" at the top of the hour. first "squawk on the street" is back with the rodeo right after this.
now the moment mark and our viewers have been waiting for, arguable e the biggest event of the year for san antonio is going on right now. it's called the san antonio stock show and rodeo. it is in full swing. live from the rodeo across town is keith martin, executive director and ceo. keith, we really appreciate it. we've been seeing some amazing videos of people riding bulls. let me just ask you, you've been
doing this for decades. what are some of the biggest events that go on at the rodeo? >> well, of course, the rodeo, erin, and then we have the largest junior market livestock show in the nation and we have a horse show and we have an area called family fair, and a big carnival, and they're all about equal, but probably our largest revenue generator is the rodeo itself held in the new at&t center. >> and they -- one of my guests was just telling me, what are your favorite events. if you're here on saturday you'll have to go to the extreme bull riding. i'm curious, what is extreme bull riding in bull riding in general seems pretty extreme to some of us. >> well, it is, but extreme bull riding is 40 of the top bull riders in the nation pairing up with 40 of the top bulls in the
nation and they ride them and have an opportunity to win $75,000. sir -- it's pretty extreme. >> wow! >> what is the premiere event at a rodeo? what is the one competition that is like the mile race or the 100-yard dash. everyone wants to see it. >> well, you can't say there is one because that's what makes rodeo so sustainable. that's why we've gone through two world wars, a great depression and now is it's a little bit of something for everyone. there's not any one particular event. probably bull riding is one of the most exciting to watch, but i think what makes rodeo what it is is that you have seven different events including the barrel racing and all of the rough stock events and the timed events.
so it's hard to say that there's any one that would be the one-mile run. i'm sorry. >> i think a lot of people don't realize that you raise a lot of money which you then devote to education, either through scholarships, grants, endowments and things like that. what was the total in 2009 and what are you hoping for in 2010? >> well, we did over 8 million $8,000,100 and we hope to match that this year and that's all determined what kind of year we have and we're expecting to have another wonderful year. >> and on that note, keith, are you looking for a record? i know that last year you had a record. obviously, we've been talking about how your economy has been stronger than a lot of other places around the country. how's attendance? >> well, it's doing good so far. think, we need some warm
weather, but, that we know we can't control one thing that makes us successful is the fact of value. in the recessionary times that we're in now, it's not only an economic value, but it's a family value, and so i think we're a little bit protected by some of the other sporting events and events because of the value that we give and the fact that we're a total family type entertainment venue. >> keith, thank you very much. we appreciate it it. >> great. enjoyed being with you, erin. >> what did you say? >> thank you, there, i'm sorry. we have a little bit of a delay. 300,000, mark. pretty incredible. extreme bull riding on sunday. 1,000,003. >> that's even bigger. >> think you can do it? >> no, i do the bare back
riding. i don't see the problem there, just take off your clothes and get on the horse. no big deal. >> there's still time to vote on today's street poll.